Capital Employed

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What is 'Capital Employed'

Capital employed is the total amount of capital used for the acquisition of profits.

2. The value of all the assets employed in a business.

3. Fixed assets plus working capital.

4. Total assets less current liabilities.

BREAKING DOWN 'Capital Employed'

This is a term that is frequently used, but very difficult to define because there are so many contexts it can be used in. All definitions generally refer to the investment required for a business to function. By "employing capital" you are making an investment.

Also known as "funds employed".

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RELATED FAQS
  1. How can I calculate capital employed from a company's balance sheet?

    Discover how to define and then use a simple method to measure a company's capital employed by looking only at its balance ... Read Answer >>
  2. Why might two companies calculate capital employed differently?

    See why not every company defines and measures capital employed in the same manner, and which methods are most common in ... Read Answer >>
  3. What does a high capital employed imply about risk?

    Learn what capital employed indicates about a company's operational risk level, and how the return on capital employed can ... Read Answer >>
  4. How is working capital different from fixed capital?

    Understand the differences between working capital and fixed capital, including definitions and examples of how businesses ... Read Answer >>
  5. As an investor in stock, how should I evaluate a company's capital employed?

    Learn how to define, calculate and evaluate a company's capital employed. See how to use return on capital employed to compare ... Read Answer >>
  6. How can working capital affect a company's finances?

    Understand how working capital may affect a company's financial strength and investment effectiveness, as it changes from ... Read Answer >>
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